Conditions for applying the VAT exemption for undeveloped areas

• The case involved a company that applied for a VAT ruling regarding the sale of plots of land on which gas-related facilities were located.
• The company sought clarification on whether the sale of these plots would be exempt from VAT.
• The National Tax Information Service ruled that the sale of plots with buildings owned by a third party would be exempt from VAT, but the sale of plots with gas networks owned by the seller would be subject to VAT.
• The Provincial Administrative Court dismissed the company’s complaint and considered any land with buildings or structures to be a built-up area, regardless of the size or number of buildings.
• The Supreme Administrative Court overturned the decision of the Provincial Administrative Court, stating that the presence of buildings on the land does not automatically make it a built-up area, and the intention of the parties to sell the land without transferring ownership of the buildings is crucial in determining VAT exemption.

Source MDDP

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